The Turkish economy is heading for a week that will bring two key reports: the second quarter gross domestic product (GDP) and August inflation data.
At the same time, the markets are eagerly awaiting to see the details and key projections in the government's new medium-term program (MTP) covering a three-year period between 2026 and 2028. The officials have said they planned to announce the program at the beginning of September.
The week will start with Q2 GDP data on Monday.
Türkiye's economy is expected to have grown by 4.1% in the second quarter and by 2.9% for 2025 as a whole, a Reuters poll showed on Friday.
Estimates of 10 economists in the poll ranged from 2.2% to 4.5% for the second quarter, with a median of 4.1% growth.
Economists participating in the survey by Anadolu Agency (AA) predict that the Turkish economy has registered the growth of some 3.87% in the second quarter of this year. Their growth expectations for the second quarter ranged from 2.2% to 5%.
The average growth expectation for the full year 2025 is seen at 3.18% in the same poll.
The big emerging market economy expanded by 2% in the first quarter in the face of tighter monetary policy. For the whole of 2024, it grew by 3.2%.
With economists expecting to see an expansion of somewhere between 2.9% and 3.1% this year, slightly lower than last year, according to the polls, reflecting the effects of monetary tightening that began in mid-2023 and has only started to ease a bit this year.
The government forecasted a growth of 4% for this year, 4.5% for 2026, and 5% for 2027 in its last MTP released last fall.
In December, the central bank started cutting after having kept the main policy rate steady for eight months. Inflation has dipped to 33.5% from as high as 75% last May.
In March and April, the bank reversed course and tightened rates, but it returned to easing in July and more cuts are expected through the end of the year. But with the policy rate still at 43%, combined with pressure from global trade wars, the economy has likely cooled compared to strong growth in recent years.
Wall Street bank Citi said leading indicators suggest activity decelerated in the second quarter, with sequential growth at 0.6%, down from 1.0% in the previous quarter.
It forecasts annual growth of about 4.5% in the second quarter, "driven by base effects and an increase in the number of working days," it said.
On the other hand, Türkiye's monthly inflation rate is expected to be 1.79% in August, while the annual rate is seen dipping to 32.6%, according to a recent Reuters poll.
The median estimate of 10 economists showed monthly inflation slowing to 1.79% from 2.06% in July. Forecasts ranged from 1.54% to 2.2%. Year-on-year consumer price index (CPI) forecasts ranged between 32.2% and 33.2%, down from 33.52% in July.
In a recent note, HSBC said inflation momentum measures improved with core goods inflation moderating below 2% in July.
"We continue to expect the central bank to deliver three 250-point rate cuts in the rest of this year, taking the policy rate from 43.0% currently to 35.5% by December....If the August CPI print also points to further disinflation gains, this might lead to a larger rate cut in the September meeting," HSBC said.
The bank is due to convene for its monetary policy committee (MPC) meeting on Sept. 11., while the Turkish Statistical Institute (TurkStat) is due to release August inflation data at 10:00 a.m. (7:00 a.m.) GMT on Sept 3.
The same day, the Trade Ministry, alongside Turkish Exporters Assembly (TIM), is also expected to announce preliminary foreign trade data for August.
